An Irishman cleared by a court in Lithuania of trying to buy weapons for the organisation which bombed Omagh may seek compensation, it was revealed.

Michael Campbell, 41, smiled as police removed his handcuffs and set him free in the capital Vilnius after his appeal was upheld.

He was arrested during an MI5 sting operation as he allegedly tried to purchase guns and explosives for the Real IRA (RIRA) and was later convicted. But today a judge said there was not enough evidence to deny that he was provoked by secret service British agents.

Mr Campbell declared: "I am very happy. I will go to Ireland as soon as possible."

The freed prisoner, from Dundalk in Co Louth, is a younger brother of the alleged founder of the dissident republican RIRA. Liam Campbell was accused by relatives of involvement in the Omagh blast.

Michael Campbell was arrested in 2008 following an international surveillance operation involving MI5 and Irish and Lithuanian intelligence services. Video footage and an audio recording were used in court.

According to prosecutors it was shown that he paid about 6,000 euro for grenade launchers, detonators, guns and explosives.

Audio was played of him discussing how easy it would be to bomb London using the equipment.

He was convicted in October 2011 of supporting a terrorist group, illegal possession of weapons and attempted smuggling and sentenced to 12 years in prison.

But appeal court judge Viktoras Kazys said there was no direct evidence proving his ties to the Real IRA.

According to the Associated Press he remarked: "The prosecution did not provide enough evidence to deny statements that Campbell's actions were provoked by undercover MI5 agents."

His lawyer Ingrida Botyriene said he was the victim of entrapment and warned he could claim compensation.

"He was acquitted because the court found that what he was accused of was a provocation. It was just an activity of the state security services," she said.

"It was unexpected, we thought that this case would reach the European Court of Human Rights, we thought it would go a longer distance. Some very serious things are not right in this case but we are happy (he was freed)."

The RIRA split from the Provisional IRA after it called a ceasefire in 1997. Along with a number of other dissident republican groups, it is trying to derail the peace process.

It shot dead two young soldiers in Antrim, Patrick Azimkar and Mark Quinsey, as they collected a pizza delivery outside their base in 2009.

The group's most infamous act was the killing of 29 people on a busy shopping street in Omagh, the highest number of fatalities during Northern Ireland's 30-year conflict.

No-one has been convicted over the bombing, but four men, convicted Real IRA leader Michael McKevitt, Michael Campbell's brother Liam, Colm Murphy and Seamus Daly, were found liable for it after a civil case taken by the families.

The UK government recently ruled out holding a public inquiry into whether more could have been done to stop the bombing.

Michael Gallagher, whose son Aidan was killed, said he had to accept the result of today's appeal but still demanded the British and Irish Governments agreed to hold an inquiry and pursue the Real IRA wherever they be.

"These are people who are clearly life-long terrorists and are involved in terrorist activities and I feel that the world would be a safer place, certainly Ireland and Britain would be a safer place, with those people behind bars," he added.

A group of politicians from the Irish Republic who visited Mr Campbell in jail said they were satisfied with the ruling.

In a statement, Independents Maureen O'Sullivan and Clare Daly, Sinn Fein's Martin Ferris and Fianna Fail's Eamon O Cuiv said: "I t was clear that not only were there serious concerns over his conviction, but that he had spent over five years in poor, overcrowded and inhumane conditions."